5 things first-time M’sian car buyers need to consider before signing that deal

[Written in partnership with UMW Toyota, but the editorial team had full control over the content.]

Buying your first car is equal parts liberating and, well, slightly terrifying. 

There’s the thrill of spontaneous road trips, easier commutes, and no longer having to pray for a kind coworker to drop you off at the nearest train station. But once the excitement settles, reality creeps in…

A car is a long-term financial commitment that will have you frequently praying, “please don’t break down this month.”

So before signing on the dotted line, here are seven things Malaysians actually need to consider when buying your first car.

1. Don’t underestimate the hidden costs

Owning a car is more expensive than you think. Aside from that shiny price tag at the beginning, it comes with recurring expenses that can quickly add up.

You have to also factor in road tax (which depends on engine capacity), insurance premiums, regular servicing, tyres, fuel, tolls, parking, and other services like car washes and workshop visits.

According to BJAK, these can total up to an estimated RM13,000 to RM15,000 annually depending on your driving habits and vehicle type. That’s on top of your monthly instalment.

What many first-time buyers don’t realise is that a car’s specifications directly affect these recurring costs. Engine capacity influences road tax, while vehicle value and safety features play a role in insurance premiums.

This is why entry-level sedans like Toyota’s Vios often appeal to budget-conscious buyers, as its engine size and safety package helps keep annual ownership costs more manageable.

Pro tip: To better prepare yourself before committing to a car, list out every monthly and yearly car-related expense you can think of, then add a 10% to 20% buffer for unexpected repairs. If the total feels tight, you may want to rethink the car model or loan terms.

2. Crunch the numbers or your loan might crush you

When purchasing cars, most Malaysians finance them through hire-purchase loans. How it works is you make a down payment and then pay the remaining cost in fixed monthly instalments. A familiar enough concept, right?

Fun fact: A down payment is usually 10% of the total cost for new cars, and 20 percent for used cars. Source: Carsome

The average loan period is between three years to nine years; the shorter the tenure, the more your monthly instalment is. 

While it may seem enticing to go with a longer tenure, it’s important to note that this may increase the total interest you pay in the end. At the same time, making a low down payment could leave you servicing a larger principal for years.

A good rule of thumb is to keep your monthly instalments and running costs at a level you can comfortably pay even if your income dips. If you don’t have a three-to-six month emergency fund, consider a more economical car model.

Another thing to note is that not all car models are treated equally by banks. Loan approval rates, interest margins, and required documentation can vary depending on how familiar financial institutions are with the model.

Opting for mainstream models from established brands like Toyota’s Prius could help with loan approvals simply because banks are already familiar with their pricing and market demand.

3. Match your car to your lifestyle, not the other way round

We get it, this is your first car and it’s tempting to get that sleek SUV or flashy hatchback. But it’s important to ensure that the model you commit to practically fits into your budget and way of life.

Ask yourself: is this car for short city hops, or long highway drives? Do you need lots of boot space for family use, or a small car that’s easy to park? 

Fuel efficiency (offered by models like Toyota Corolla Cross HEV) can matter more than engine size when you’re stuck in Klang Valley traffic every day. If parking at home or work is limited, a compact hatchback (like Toyota Yaris) often beats an SUV in day-to-day convenience and cost. 

Because the reality is that even the best-looking cars aren’t worth it if they don’t fit into your lifestyle and cause you daily stress. 

4. Service networks and spare parts can save your wallet

Nothing kills the joy of a new car faster than unexpected breakdowns. Brands with strong reliability records and wide service networks make ownership much smoother. 

For example, major manufacturers like UMW Toyota operate nationwide and often have readily available spare parts. Such factors help to keep your long-term maintenance affordable and predictable.

Other perks you’ll receive is a good warranty, transparent service packages, and accessible mechanics that could save you significant money and stress down the line. 

Pro tip: Before deciding, visit a few brand service centres to get a feel for wait times, service packages, and transparency in pricing. 

5. Depreciation and resale value matter sooner than you think

Cars lose value fast. A new vehicle can drop a significant percentage of its value within the first year, and then continue to depreciate annually. 

The exact amount depends on the brand, the model’s popularity, fuel efficiency, and sometimes even the car’s colour. Take a Perodua Myvi as an example. This model goes for RM55,300 today, but will probably lose between 40% to 50% of its original value if you sell it in the next five years.

So if you’re planning to upgrade within the next couple years, we suggest choosing a model that historically retains resale demand. Some ideas include the dependable Toyota Camry and the durable Toyota Hilux.

Pro Tip: Avoid very niche or extreme customisations that limit the pool of potential buyers later on.

A little preparation can go a long way

Buying your first car is a major milestone, yet it’s easy to get caught up in the thrill of a shiny new model. 

To help you navigate this important decision, here are additional essential factors to check before you sign:

• Run the total cost-of-ownership numbers with a 10–20% contingency.
• Confirm loan terms and ask for the Effective Interest Rate (EIR) and all fees in writing.
• Test-drive the car in real-world conditions you’ll face daily.
• Keep all service records for a smoother resale and to prove maintenance.

By keeping all of these considerations in mind, you can approach your first car purchase with better confidence. 

• Learn more about UMW Toyota here.
• Read other articles we’ve written about Malaysian businesses here.

Featured Image Credit: UMW Toyota